Province Introduces Regulations to Amend Pension Benefits
Nova Scotians want to have peace of mind in their retirement years. That is why government is introducing regulations under the Pensions Benefit Act to improve the flexibility and stability of defined-benefit pension plan funding.
“These regulations will help stabilize contribution requirements for employers, while maintaining the security of benefits for plan members under the Pensions Benefit Act,” said Finance and Treasury Board Minister Karen Casey.
The regulations include amending the funding requirements for defined-benefit pension plans. This includes reducing required solvency funding to 85 per cent of solvency liabilities instead of 100 per cent and strengthening going-concern funding to add a funding cushion above the 100 per cent funding threshold. Any going-concern deficit will have to be paid off faster than was previously allowed; over ten years instead of fifteen. Going-concern funding assumes that a pension plan will continue indefinitely.
Additional changes in the regulations include incorporating federally permitted investment rules, reducing reporting requirements for solvency-exempt plans, allowing employers to take holidays from making normal contributions when the plan is overfunded, exempting individual pension plans from sections of the Pensions Benefit Act, reducing restrictions on benefit improvements, and defining and clarifying conditions around reserve accounts and annuity buy outs as introduced in recent amendments to the Pensions Benefit Act.
The regulations will come into effect April 1.
- current solvency funding requirements for private sector defined-benefit pensions plans are at 100 per cent of liabilities measured on a solvency basis – this requirement will be reduced to 85 per cent
- going-concern funding requirements for private sector and some public section defined benefit pension plans will require a cushion and will ensure that any deficiencies are paid over 10 years instead of 15, so that shortfalls are addressed in a timely manner
- benefits for plan members will not change as a result of the amendments
To view the Pensions Benefit Act Regulations visit https://novascotia.ca/just/regulations/rxam-z.htm#penben